Paul Samuelson once described comparative advantage as the best example of a â€œtrue and non-trivial propositionâ€ in the social sciences. An interview with Senator Barnaby Joyce in the FT (online when hell freezes over) is a neat reminder of the truth of Samuelson’s aphorism.
In rejecting the reforms, he professes to being sceptical of economics: “Keynesian principles – they’re all for books,” he says. “If you’re too enthused with economic principles and theorems developed at Harvard or Cambridge, well that’s great if you believe the world’s some sort of esoteric paradigm. But it’s not.”
His unorthodox doubts reflect a small businessman’s credo that emphasises practical experience over trendy management ideas.
Mr Joyce started a rural accountancy practice after studying for a business degree and finishing at one of Sydney’s top private Jesuit schools.
Yet this pragmatic outlook has led him to some unconventional conclusions. Take international trade. Australia is part of the Cairns Group of agricultural free trading nations in the World Trade Organisation.
But, Mr Joyce says, “there’s no point having an expansive trade liberalisation formula when no one else in the world does. It’s one in, all in. You’re going to look foolish if you’re the only one playing strip poker.”
Senator Joyce seems to be a bright guy, representing rural Australians, who have most to gain from open trade. Yet even he seems to think like a mercantilist: not recognising that the largest benefits that a country typically receives from trade liberalisation are from opening its own markets.